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American Gilsonite Company Reaches Agreement with Second Lien Noteholders and Equity Sponsor on Prepackaged Reorganization Plan

Normal operations expected to continue with no impact on customers, employees, or vendors

HOUSTON, TEXAS – October 24,2016 – American Gilsonite Company, Inc. ("American Gilsonite", or “AGC”), the world’s principal commercial miner and processor of uintaite, the unique mineral marketed under its trademark name “Gilsonite,” today announced that it has reached an agreement with holders of more than 67% of its Second Lien Notes (the “Supporting Noteholders”) and its current equity sponsor on the terms of a reorganization that will eliminate substantial indebtedness, significantly reduce debt service, and provide financing to restructure its balance sheet.

“We are pleased to have reached an agreement with our key financial stakeholders that recognizes the underlying strength of our business and provides a path to restructure our debt without any impact on our customers, employees, or vendors,” said David G. Gallagher, Chief Executive Officer. “American Gilsonite has positive operating cash flow, a highly differentiated product offering, more than 100 years of mineral reserves, and a broadly diversified customer base. With the implementation of this prepackaged reorganization plan, we will significantly strengthen the company’s balance sheet and create a capital structure that is more sustainable over the long term.

“Today’s announcement is good news for our customers, employees, and business partners, as it ensures we will have adequate liquidity to continue uninterrupted operations even under these adverse energy market conditions,” Mr. Gallagher concluded.

Company Initiates Voluntary, Court-Supervised Process to Implement Prepackaged RestructuringIn order to implement the agreed upon restructuring, AGC and its subsidiaries (the “Company”) filed a Joint Prepackaged Plan of Reorganization (“Prepackaged Plan”) along with voluntary petitions for protection under chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. The Company intends to use the court-supervised process to facilitate a financial restructuring designed to restore the Company to long-term financial health while continuing to operate in the normal course of business without interruption.

In accordance with the Prepackaged Plan, holders of general unsecured claims, including trade vendors, employees, and lease counterparties, will receive payment in full on account of existing obligations in the ordinary course of business. The Company’s revolving lenders will also be paid out in full.

Commitment Secured for $30 Million in New Financing from Current NoteholdersThe Supporting Noteholders have agreed to provide the Company a $30 million credit facility. This proposed debtor-in-possession (“DIP”) financing will help support the Company’s reorganization plans and normal post-petition operation of its business, including timely payment of operational expenses (purchased goods and services), employee wages, benefits, and other obligations on an uninterrupted basis. The principal amounts extended to the Company under the DIP financing will convert in full to an exit facility upon the Company’s emergence from the restructuring process. The Company has also filed a number of customary first day motions with the Court to support its ongoing business operations.

The Supporting Noteholders have agreed to vote in favor of the Company’s Prepackaged Plan and exchange their loans for reorganized equity and subordinated debt. The Prepackaged Plan, which will transition ownership to the Company’s Second Lien Noteholders, is also supported by the Company’s current shareholders.

Gilsonite® is a naturally occurring hydrocarbon resin with a number of unique chemical properties and physical characteristics that improve the performance of many critical materials and applications. The strength, flexibility, extreme light weight, and environmental safety of Gilsonite make it a superior additive for cementing and drilling fluids in the oilfield, as well as improving performance and quality in asphalt, inks, paints, stains, construction materials, and foundry castings. AGC works with its customers as a technical partner and trusted supplier to ensure superior performance in every application.

Forward-Looking StatementsThe information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.

About American Gilsonite CompanyAGC operates as an industrial minerals company and is the world’s primary miner and processor of uintaite, a variety of asphaltite, a specialty hydrocarbon which AGC markets to industrial customers under its registered trademark name “Gilsonite®”. Gilsonite is a glossy, black, solid naturally occurring hydrocarbon similar in appearance to hard asphalt and is believed to be found in commercial quantities only in the Uinta Basin in northeastern Utah. Because of its unique chemical and physical properties, Gilsonite has been used in more than 160 products. The Company sells its products to customers in four primary markets: (i) oil and gas, (ii) inks and paints, (iii) foundry and (iv) asphalt. AGC is headquartered in Houston, Texas.